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Demand and SupplyGAP Analysis of
BrightestLEE(Scented Organic Repellant Candle)
A Demand & Supply Gap AnalysisPresented to theFaculty of the
College of Business Administration and AccountancyColegio de San Juan de Letran
Intramuros, Manila
In Partial Fulfillmentof the Requirements for
Econ102 Basic Microeconomics
LEE, MichaelMERCADO, Gilbert
October 2012
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Table of Contents
Page
1.1 Name of the Firm 10
1.2 Location 15
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LIST OF TABLES
Page
Table 1. Market Survey Results 10
Table 2. Distribution of Tasks and Responsibilities 15
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BrightestLee(Scented Organic Repellant Candle)
1.1Name of the Firm
BrightestLee is the name of the proposed business. It came into light as the proponents
brainstormed for a project enterprise as a requirement of their course. Bright and wild ideas
popped up but the name BrightestLee was chosen as suggested by Mr. Michael Lee, one of the
proponents. The name vocalizes inquisitiveness, versatility and uniqueness. The proposed
enterprise offers best scented candles that surely appeal to the interest of the prospective
consumers.
1.2 Location
BrightestLee is located at 72A K-5 Judge Jimenez, Kamuning, Quezon City. The proponents
find the right place to promote and sell the product as it intends to capture the household
market. The head office and the plant occupy the same place in the District 4 of Quezon City.
The plant size is 30 square meters which is considered sufficient to operate the business.
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Figure 3. Business Location
1.3Description of the Product
The product is organic mosquito repellant candle. It is an eco-friendly, natural candle made of
100% pure green vegetable palm wax and soy wax blended with neem extracts and essential
oils. These materials are all sustainable and kind to the environment and living organism aswell..
72A K-5th Kamuning, Q.C.
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Figure 1. BrightestLee Organic Scented Candles
BrightestLee Candle is a scented repellant candle that promises every household to prevent
insects that cause different types of diseases particularly mosquitoes and secure every member
of the familys health. It is an environmental friendly candle which organic because of its
components. This product can also be used for decoration and air freshener in any home.
1.4 Methodology
This study uses both primary and secondary data. In collecting the supply data, the proponents
conducted an interview to the two direct competitors identified of the proposed business. These
are Natures Garden Scented Citronella Candle and Domus Lucis Citronella Candle. A survey
was conducted on the intended target market who is the residents of Kamuning, Quezon City.
These respondents were determined using the sample size calculator at SurveySystem.com.
There were 100 respondents selected randomly using a 95% confidence level and 9.6
confidence interval. The questionnaire used in the survey was designed by the proponents to
determine the respondents opinion, attitude towards the product, and buying preferences. The
questionnaire has close-ended questions, wherein the respondents are asked to place a check
mark on the space provided for the answer they choose. Most of the close-ended questions are
in multiple choices, while others are answerable by yes or no. In determining the historical
demand and the projected supply, a straight-line method was employed.
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1.5 Demand
This establishes the prospective customers of BrightestLEE. These are residents of Kamuning,
Q.C who are willing to try an organic repellant candles and their frequency of buying.
1.5.1 Consumption for the Past Three Years
Table 1. Consumption of Scented Repellant Candlesfor the Past Three Years
Year PopulationHistorical Demand
(per piece)
2008 426,854 5,270,195
2009 434,973 5,372,377
2010 443,246 5,476,541
Table 1 shows the historical demand of scented repellant candles Kamuning, Q.C. for the past
three years. The historical demand was computed using the 2007 census population of NSO.
The population of District 4, Q.C for 2007 was 418,887 residents with a growth rate of 1.902
percent. Based on the survey conducted to the target market, the willingness of the
respondents to buy the product and their frequency of buying were multiply to the population
with the growth of the area used for the projection. (See Appendix A for the detailed
computation).
1.5.2 Target Market
The major consumers of BrightestLee are the residents of Kamuning area in District 4, Quezon
City. These are the households who wants to protect their family from insect related diseases
particularly mosquitoes.
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1.5.3 Projected Demand
Table 2. Projected Demand of Scented Repellant Candlesfor the Next Three Years
Year PopulationProjected Demand
(per piece)
2012 460,268 5,688,908
2013 469,022 5,797,111
2014 477,943 5,907,372
For the projected demand in Table 2, the proponents utilizes the straight-line method with the
population growth rate of 1.902 percent of District 4, Q.C for the next three years.
1.6 Supply
1.6.1 Supply for the Past YearsTable 3. Supply of Scented Repellant Candles
for the Past Three Years
YearNatures Garden
Citronella ScentedCandle
Domus LucisCitronella Candle
Historical Supply(per piece)
2008 217,634 142,518 360,152
2009 221,854 145,282 367,135
2010 226,155 148,099 374,254
Table 3 presents the supply of scented repellant candles at Kamuning, Q.C. for the past three
years. There are two direct competitors of the proposed business. These are the Natures
Garden and Domus Lucis which are both selling citronella scented candles. Using the July
2011 data of their sales and the interview conducted by the proponents to the respective
competitors, both competitors have annual increased in their sales of 10 percent over the past
years. (See Appendix A for the computation)
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1.6.2 Projected Supply
Table 4. Projected Supply of Scented Repellant Candlesfor the Next Three Years
Year
Natures Garden
Citronella ScentedCandle
Domus Lucis
Citronella Candle
Projected Supply
(per piece)
2012 253,594 166,067 419,661
2013 278,953 182,674 461,627
2014 306,849 200,941 507,790
With the 10 percent increased in sales of both competitors, the total projected supply is
presented in Table 4 for the next three years (See Appendix A for computation). The above
table reveals that Natures Garden is the market leader when it comes to scented repellant
candles.
1.7 Demand and Supply Analysis
Table 5. Demand and Supply Gap Analysis
YearProjected
Demand (perpiece)
ProjectedSupply (per
piece)
Demand &Supply GAP(per piece)
2012 5,688,908 419,661 5,269,247
2013 5,797,111 461,627 5,335,484
2014 5,907,372 507,790 5,399,582
Table 5 illustrates the demand and supply gap analysis of scented repellant candles at
Kamuning, Q.C. for the next three years. This shows that the present market is not fully
satisfied by the existing competitors around the area. This gap is accounted for 93 percent of
the projected demand. Realizing this opportunity, the proponents are proposing of scented
repellant candles made out of neem extracts and oil.
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1.8 Projected Sales
Table 6. Projected Sales of Scented Repellant Candlesfor the Next Three Years
Year
Demand & Supply
GAP(per piece)
Market Share
Projected Sales
(per piece)
2012 5,269,247 1% 52,692
2013 5,335,484 2% 106,710
2014 5,399,582 3% 161,987
Table 6 demonstrates the projected sales of BrightestLee in the next three years. Using the
past years sales data of the competitors, the proposed business has assumed a 1% market
share for 2012 to project the sales since it is a new entrant in the market. Employing the
proposed marketing strategies and program, the business is expected to increase its market
share by 2% and 3% for 2013 and 2014 respectively considering BrightestLee is a small scale
enterprise.
1.9The Brand
Figure 2. BrightestLee Logo
The partners came up with the idea of BrightestLee Candle. This epitomizes inquisitiveness,
versatility and uniqueness of the product. BrightestLee offers different types of designs,
shapes, and scents of candles. The three circles of the logo represents the three proponents
and the bond of their business friendship.
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.
1.9.1 Price
Table 7. Prices of Scented Repellant Candle
Company Price (in Php)
BrightestLee Candle 70
Natures Garden Citronella Scented Candle 150 250
Domus Lucis Citronella Candle 120 150
1.9.2 Place of Distribution
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Figure 3. Business Location
72A K-5th Kamuning, Q.C.
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